We grew up accustomed to using fiat money, but fiat money is usually controlled by a single entity, usually a central bank. Fiat currency is centralized, so if you print money yourself, you will inevitably be punished by the law.
From this perspective, the way you think about Bitcoin (BTC) could really change. Bitcoin creates an entirely new system under which money is decentralized and not tied to a single entity. Because of Bitcoin’s decentralized nature, people with powerful computers can create the currency by staying active in the community.
It was a groundbreaking paradigm shift that many are still struggling to understand and embrace. As bitcoin grows in popularity, legal regulators, law enforcement agencies and tax authorities are also working hard to find bitcoin’s place within the existing regulatory and legal framework.
In this case, we can’t help but ask : is Bitcoin legal?
Why People Have Concerns About Bitcoin’s Legality
Government authorities have been slow to act on Bitcoin for a number of reasons. Their concerns are also reasonable, let’s analyze them in detail.
For the first (and easiest) reason, government authorities are still struggling to understand how Bitcoin works. We all know that learning Bitcoin takes some time, so imagine that it is not as easy to make laws and regulations for things that are not fully understood.
Authorities are concerned about the creation of a financial community beyond their control, which would involve the trading and security of people’s funds, which is the main reason for their concerns. Since many U.S. exchanges are subject to regulation, there are many offshore exchanges for traders to choose from, which has raised concerns among many regulators.
Second, there are two other incidents that have raised concerns for regulators: the Mt. Gox incident and the Silk Road incident. These two incidents expose Bitcoin holders to the possibility of fraud, as well as the use of digital assets for illicit activities.
In 2014, Mt. Gox, one of the most prominent BTC exchanges, filed for bankruptcy due to technical issues and the theft of 744,000 bitcoins from its users. Silk Road, a black market platform launched in 2011, is known for using bitcoin for illegal drug dealing and money laundering.
These two platforms have given Bitcoin and other cryptocurrencies a bad name. Many authorities have become extremely concerned about this, and the legality of Bitcoin has become more unclear.
The Legality of Bitcoin in Today’s World (and Your Role in Its Use)
While these concerns are worrisome, they are gradually being addressed as Bitcoin grows and matures. To prevent such problems from recurring, many security protocols have been put in place to ensure the safety of BTC holders and the authorities that allow the use of these digital assets.
In most cases, whether Bitcoin is legal or not depends a lot on where you are, and what you use it for.
Although bitcoin is legal in many parts of the world, there are still some places where bitcoin is not allowed.
Your role in using Bitcoin also determines its legality. As an example, let’s take a look at the legal provisions in the United States.
1. Purchase goods and services
In 2013, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) classified Bitcoin as a “convertible, decentralized virtual currency.” They also issued a guide stating that “individuals who create this convertible virtual currency unit and use it to purchase real or virtual goods and services are users of this convertible virtual currency and are not regulated as money transmitters,” Therefore, such operations are within the scope of the law.
2. Bitcoin as an investment vehicle
Is it legal to buy bitcoin in the US? According to the same guide published by FinCEN, buying Bitcoin is completely legal. Many US exchanges are regulated and therefore require their users to comply with anti-money laundering and KYC (know your customer) policies.
You can buy bitcoins as long as you are authenticated with your account.
3. Company accepts Bitcoin as payment method
Businesses, big or small, can accept bitcoin as a payment method for goods and services, as long as they operate a legitimate business. Note that you also need to be mindful of tax-related matters.
Legitimacy depends on many factors
There is no one-size-fits-all answer to the question “Is Bitcoin safe and legal?”
While Bitcoin is certainly safe to use, its legality depends on where you are, who you are, and what you use it for. Bitcoin is generally legal in developed countries. But in emerging markets, things are different.
Most importantly, be sure to know your country’s specific laws. Before engaging in any form of bitcoin or cryptocurrency transaction, it is important to ensure that your authorities do not consider it a criminal offense. You can also seek legal advice from a lawyer in this regard.
Of course, we regret that not everyone can see the potential of digital assets like Bitcoin, but we must leave room for every country to be ready to accept it. After all their main purpose is to protect people from fraud and to guard against illegal activities.
Countries wishing to ban Bitcoin and other cryptocurrencies have the opportunity to see potential benefits, such as the opportunity to assist unbanked, underbanked regions and users. But until they accept it, we can only wait quietly. As the saying goes: “Rome wasn’t built in a day.” There’s still a lot of time, we just have to wait for the world to get ready.
Please check Bybit official website or contact the customer support with regard to the latest information and more accurate details.
Bybit official website is here.
Please click "Introduction of Bybit", if you want to know the details and the company information of Bybit.
Comment by Hans
April 24, 2024
as I am trading here various assets, for me it's the most important feature. i mean, flexibility in tradable markets. i alternate trading styles, meaning that sometimes I trad...